All Forum Posts by: John Teachout

Depending on the CPA's question regarding treatment of depreciation, one thing that you may be able to do is depreciate some expenses that you claimed as deductions. This is sorta the opposite of what most try to do but it may be a way to show more profit in 2022 and eventually get the depreciation over the next couple decades...

Is refinancing something that you MUST do or is it a preferred path. The DTI issue may not be fixable. What happens then?

Well, considering 2022 is over, it's not the best time to implement a strategy. This should have been under consideration 6 months ago. That said, your three properties don't show income? Are they new acquisitions?

I think a lot of people are looking at bonus/accelerated depreciation and are not fully considering that eventually the IRS will want their share. Recapture can be a big bill upon sale. Sure there's 1031 options but even that is just kicking the can down the road. Depreciation is a tax deferment, not a deduction.

There's a ton of real estate agents out there. Some newly licensed ones may be happy to write offers just to get the experience and be active. I certainly wouldn't continue a relationship with a realtor that wouldn't submit your offers as long as they're not stupid low. I've told realtors we work with that if we're making a low offer they can run it by the listing agent verbally and then we'll put it on paper if they think it's a possibility. One thing you're doing differently than us is you intend to open a negotiation for a purchase and our offers are a one time deal. ie, we have one offer we make, no contingencies, no inspections, just an all cash offer and it's a "take it or leave it."

Will these multi-families be your first properties?

I'm a fan of metal roofs. It's a once in a lifetime installation. ie, by the time a metal roof needs replacing, you won't be on earth to worry about it. They are definitely more costly but it's common in my area (Georgia) for them to install purlins over the existing shingle roof and install the metal on that. This eliminates the need for a tear off and the expensive labor and disposal fees for that. Metal roofs are very light compared to shingles so if there's only one layer, weight isn't an issue. (some municipalities may not allow it so that would be a consideration. I have a metal roof on every structure on our estate (lol) That includes our home, separate garage, well house, large workshop, etc. I've never paid to have a metal roof installed so don't know labor charges (I've always done my own)

I don't have a solution for this situation but have an observation that this type of thing is going to crop up more and more as there's push back against STR in many places. Lots of potential homeowners are convinced that STR investors have ruined their chances of purchasing a property by overpaying and buying up all the decent properties in certain areas. I don't know whether that's the case or not but it is a perception that is stimulating action. It's vital that anyone buying an STR either has confidence they can implement their model or they need to have exit options.

Could you or your team go to the property with a tape measure and just get the outside dimensions? That would put you in the ballpark...

We purchased 5 occupied properties in early 2020. We haven't made any purchases since but have been working full time doing turnovers/remodels on properties we already own. We're not currently planning on purchasing any more houses in the foreseeable future. It'll take us all of 2023 to get what we have in line rehabbed. We currently have 4 vacant houses. One's a 2 week project and the others are 1/2 a year each... We're currently seeking more "passive" investments and want to transition into that realm. (we're in our mid 60's) We live off of rental income.

If you cut down the tree, the roots may remain but they will stop doing further damage. Only certain types of trees tend to generate additional growth from the stump and roots. On many trees, once the tree is gone the stump is dead. Also, there's a number of methods to "kill" stumps that tend to not die, so if it were me, I wouldn't worry about taking down the fence to remove the stump. Oh, by the way I own a tree service so I've seen this situation a few times...